Bank Scorecards: The Devil's in the Details

More and more companies are grading their banks' performance -- and banks are eager to help. New measurement methods are making both sides happier.

If you ask a group of CFOs whether they think relations between banks and corporate finance departments are (a) deteriorating because of tight credit, bank mergers and the decline of personal service, or (b) improving because of new technol-ogy and fewer, more strategic relationships, chances are, the answers will be about evenly split. And many of your respondents may be tempted to reply "both of the above." Companies' banking relationships are in flux, and finance executives'
level of satisfaction with the services their banks provide varies widely.

But while they may not always see eye-to-eye, banks and their corporate customers are finding common ground in their desire to improve the reliability and efficiency of bank services. After a time when big issues like companies' need to preserve liquidity and access to credit often swept aside little issues like banks' data-keying errors and missed reporting deadlines, both sides are reasserting the importance of the little things. And both are turning to sophisticated performance metrics to quantify banks' success -- or failure -- in managing those critical details.

Savvy finance departments have long used report cards as a way to push their banks to do a better job, especially in their cash management services. A scorecard is a tough management tool, a way to hold your banks to a reckoning; if they don't do what you want them to do, you can give them low grades. A new generation of these evaluation tools is seeing a surge in popularity. And now banks are developing their own performance report cards and working with their customers to identify problems and to document successes.

This shared pursuit of high performance is restoring goodwill and respect in banking relationships that often have frayed over the past three difficult years, bankers and treasury pros say.